Ultra low cost carrier Spirit Airlines on Monday rejected JetBlue Airways’ $33-per-share takeover offer, saying it had a low likelihood of winning approval from government regulators.

JetBlue on Friday had enhanced its offer — but not its $33 per share price — and promised a $200 million reverse break-up fee — or $1.80 per Spirit share – if the deal does not go through for antitrust reasons. JetBlue disclosed the new offer on Monday.

JetBlue’s offer is significantly higher than the current roughly $21.88 per share value of the cash and stock bid from Frontier made in February.

Spirit shares fell 8.9% to $21.50, while Frontier was down 2.9% to $10.32 and JetBlue shares rose 1% to $11.11

Frontier and JetBlue are in a battle for Spirit to better compete with legacy carriers, or the “big four” airlines that control nearly 80% of the US passenger market.

Frontier had no immediate comment

The Justice Department and six states in September sued to unwind JetBlue and American Airlines’ “Northeast Alliance” partnership, alleging the agreement would lead to higher fares in busy northeastern US airports.

“We believe a combination of JetBlue and Spirit has a low probability of receiving antitrust clearance so long as JetBlue’s Northeast Alliance (NEA) with American Airlines remains in existence,” Spirit said in a letter to JetBlue Chief Executive Robin Hayes on Monday.

The Justice Department declined to comment.

JetBlue said on Monday that it would offer a remedy package to address regulatory concerns “that includes the divestiture of all Spirit assets in New York and Boston so that JetBlue does not increase its presence in the airports covered by the NEA. The package would also include gates and assets at other airports, including Fort Lauderdale.”

Hayes told Reuters in early April he believed the court challenge over the NEA would be resolved before the Justice Department determined the fate of a JetBlue Spirit tie-up.

“We’ve had unprecedented amounts of consolidation, which the DOJ has approved and now it’s about how do we make sure the rest of us can continue to discipline the legacy carriers and create that competition,” Hayes told Reuters in April. 

Spirit said it believes the Justice Department and a court “will be very concerned that a higher-cost/higher fare airline would be eliminating a lower-cost/lower fare airline in a combination that would remove about half of the ULCC (ultra low cost carrier) capacity in the United States.”

Spirit said in its April 25 response to JetBlue that it proposed “requiring JetBlue to take any action required to obtain regulatory clearance, which specifically included abandoning the NEA at closing.”

Spirit added that “given this substantial completion risk, we believe JetBlue’s economic offer is illusory, and Spirit’s board has not found it necessary to consider it.”